Midcap Pharma Stock Trading Near 52-Week High, Sharekhan Assigned "Buy" For 20% Upside

Sharekhan has a "Buy" on Zydus Lifesciences Ltd. (Formerly known as Cadila Healthcare Limited) with a target price of Rs 572 apiece. The brokerage claims a 20% upside from its current level if purchased at the current market price today. It is a leading Indian Pharmaceutical company and a fully integrated, global healthcare provider. It is a midcap company having a market valuation is Rs 48,651.59 crore.

Zydus Lifesciences' Stock Overview

The share of Zydus Lifesciences is currently trading at Rs 479.05 apiece, up 0.08% from the previous close. The stock hit the 52 week high on 16 March 2023 at Rs 488.30 apiece, and 52 week low on 11 May 2022 at Rs 319 apiece, respectively. The stock has given positive returns over the past 5 years. It gained 2.52% in 1 month and 14.12% in the past 3 months, respectively. It has given 30.41% positive return in the last 1 year. In 3 years it gave 71.09% positive return. In 5 years it gave 29.51% positive return.

Sharekhan Maintain Buy with an unchanged PT of Rs. 572/share

According to Sharekhan, Zydus Lifesciences is expected to reap the benefits of strong products launches in the US including for gTrokendi XR and gRevlimid, transdermal and other launches and volume growth. It expects gRevlimid sales to improve in the quarters ahead, as well. Clearance of Moraiya facility is expected to help in getting the approval for transdermal products, filed from Moraiya. The company expects to commercialize at least 2 transdermals in FY24. As of December 2022, over 30 products including a few transdermals were pending approval from Moraiya.

"Domestic market is expected to grow strong as well driven by NCEs and biosimilar portfolio of products. Stock trades at an attractive valuation of ~18.6x/~16.7x its FY2024E/FY2025E EPS, which is trading below the listed peer set. Hence, we maintain a Buy on the stock with an unchanged PT of Rs. 572," the brokerage has said.

Key Risks

According to Sharekhan, the key risks are Price erosion in the US generics business could hurt performance and Forex volatility could affect earnings.

Disclaimer - The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.